It is important
to consider the costs and responsibilities of buying your own
home before making a decision to go ahead. You should take your
own independent financial advice before making any commitment.
Here is a list of some of the costs you will have to pay.

Survey and legal costs

You will be
responsible for your own solicitor’s costs, survey costs and
costs associated with obtaining a mortgage. Lenders normally
charge for a property valuation and an arrangement fee.

The housing
association will not require you to get a full structural
survey.

Land Registry

When you buy a
home, your solicitor has to arrange for its details to be
registered at a government office, the Land Registry. You will
need to pay a fee for the registration and your solicitor will
tell you how much this will cost.

Stamp duty

Stamp duty is a
tax you may have to pay if the home you buy is above a certain
price. Your solicitor will inform you if any stamp duty is due.

Deposits

Mortgage
lenders may require a deposit for the mortgage and this may vary
from lender to lender. An independent financial advisor will be
able to confirm if this is required and at what percentage of
the borrowing.

You will be
required to pay the housing association a £250 deposit in order
to reserve a selected plot. This will be deducted from the
purchase price upon completion. It is non refundable if a
successful completion is not achieved.

Mortgage repayments

Most mortgages
require you to pay the loan by monthly repayments, which may
increase or decrease if interest rates change. The amount you
can afford to borrow will depend on your income, outgoings and
savings. An independent financial advisor will be able to
explain the costs of different types of mortgages available.

Mortgage payment protection
insurance

When you
arrange your mortgage you should consider whether you would
benefit from the security provided by Mortgage Payment
Protection Insurance (MPPI). There are many such policies
available and their terms and conditions vary considerable. You
should seek advice from your lender and/or an independent
financial adviser to find out whether MPPI will be of benefit to
you and to decide on a policy that will suit your needs and give
you the cover you require.

If at any time
you become unable to meet your mortgage repayments because you
lose your income through, for example, unemployment or ill
health, your home may be repossessed by the mortgage lender.

Help with
mortgage repayments is available through the State benefits
system but this assistance is limited and you are unlikely to
receive any help with your repayments for the first nine months
of your claim. Depending on the size of your mortgage any
benefit paid will help with your mortgage interest but not with
other expenses on your mortgage or insurance.

Insurance

You will have
to insure your home in case your property is damaged or
destroyed by fire or similar disaster. This is called Buildings
Insurance. As well as insuring the building, we also feel it is
important to insure your belongings and furniture. You should
take your own independent financial advice before making any
commitment.

Service Charges

If you buy a
leasehold property, normally an apartment, you will have to pay
a monthly service charge. This contributes towards the upkeep
and maintenance costs for the building and communal areas, the
responsibility of which lies with the Housing Association (also
the Freeholder or Landlord). This also includes the buildings
insurance.

Costs will be
listed in the service charge and service charges vary from
scheme to scheme.

Repairs

When you buy a
‘leasehold’ property you are responsible for all repairs
within your own home and not the fabric of the building or
common parts. When you buy a ‘freehold’ property, normally a
house, you are responsible for all repairs and
maintenance to your property.

Services

Other costs you
need to pay are utility bills - gas, electricity and water,
Council tax, buildings insurance (freeholders only) and contents
insurance.

Homes within reach is a low
cost home ownership scheme that provides assistance to eligible
first-time buyers trying to get onto the housing ladder. The scheme is
administered by a group of housing associations spread across
Wales.